Investing.com - The Australian and New Zealand dollars were trading close to one-month highs against the broadly weaker U.S. dollar on Thursday as doubts over the path of Federal Reserve rate hikes this year hit the greenback.
AUD/USD was at 0.7172, not far from overnight highs of 0.7190 after ending the previous session with gains of 1.7%.
The greenback weakened across the board on Wednesday after a slowdown in U.S. service sector activity prompted concerns that weakness in manufacturing may be spreading to other sectors.
The weak data, along with dovish comments by a Federal Reserve official, added to doubts over how much the Fed can raise rates this year.
New York Fed President William Dudley said the weakening outlook for the global economy and any further strengthening of the dollar could have "significant consequences" for the health of the U.S. economy.
The commodity linked currencies had already risen earlier Wednesday as a recovery in oil prices whetted risk appetite.
Oil prices extended gains into a second session on Thursday amid hopes for a deal between major producers to cut production in a bid to tackle one of the largest supply gluts in decades.
NZD/USD eased up 0.14% to 0.6672, near Wednesday’s highs of 0.6696.
The kiwi ended that session with gains of 2.04% after better-than-forecast domestic jobs data was seen as diminishing the chances of a rate cut by the country’s central bank.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was near three month lows at 97.10.